This coverage is sometimes viewed as an unnecessary expense for a non- profit corporation. Many Directors feel they have no exposure because there are no shareholders as in a ‘for profit’ corporation. 55% of D&O litigation comes from ‘employees’ and ‘customers’ or anyone who receives a non-profit’s service. Many states have passed laws limiting the liability of non-profit volunteers. These laws only provide a certain amount of immunity to volunteers and provide no protection to the organization’s employees or the entity itself. These laws can provide limited immunity in state court but not in Federal Court. Boards of Directors and Officers and even volunteers can be held personally liable for decisions and actions made on behalf of their organizations or quite possibly the lack of decisions or actions. There is a need for D&O liability coverage particularly considering the willingness of people to bring a lawsuit over almost anything.

D&O liability is designed for those situations in which Directors and Officers are held responsible for decisions and actions made on behalf of their club or organization. Some of the examples of the allegations are mismanagement of funds or policies (can involve membership), discrimination, sexual harassment, wrongful acts, improper payment, poor judgment in the conduct of affairs, conflict of interest, waste of assets, acts in bad faith, failure to maintain property, slander, libel, defamation of character, and gross negligence. This list is not all-inclusive as any allegation may contain language not already described.

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